Taxation in times of high inflation

Summary:

A sustained period of high inflation will impact the total sum of a country's tax receipts and the overall composition of its tax revenue. In particular, an overall rise in consumer prices will automatically push up value added tax (VAT) receipts. In response to the current rise in prices, notably for energy, the European Commission has issued guidance to clarify the options available to Member States under EU tax law to support struggling households and businesses.